Canadian dollar steady near 14-month highs even as home sales slide

Reuters Staff

3 Min Read

TORONTO (Reuters) - The Canadian dollar was little changed against its U.S. counterpart on Monday, holding near 14-month highs following a Bank of Canada interest rate hike last week even as domestic data showed a big drop in home sales.

FILE PHOTO - A Canadian dollar coin, commonly known as the "Loonie", is pictured in this illustration picture taken in Toronto January 23, 2015. REUTERS/Mark Blinch

Resales of Canadian homes fell 6.7 percent in June from May, the largest monthly drop since 2010 and the third straight monthly decline as Toronto sales plunged, the Canadian Real Estate Association said.

At 9:44 a.m. ET (1344 GMT), the Canadian dollar CAD=D4 was trading nearly unchanged at C$1.2651 to the greenback, or 79.05 U.S. cents.

The currency’s weakest level of the session was C$1.2672, while it touched its strongest since May 2016 at $1.2641.

Last week, the loonie rose 1.8 percent as the Bank of Canada raised rates for the first time in seven years and signaled it will hike again over the coming months. The currency has gained more than 6 percent since the central bank turned hawkish in June.

In other domestic data, foreign investors ramped up purchases of Canadian securities in May to C$29.5 billion, the second largest amount on record.

Prices of oil, one of Canada’s major exports, edged higher as fewer drilling rigs were added in the United States. U.S. crude CLc1 prices were up 0.06 percent at $46.57 a barrel.

Speculators cut bearish bets on the loonie for a seventh straight week, data from the U.S. Commodity Futures Trading Commission and Reuters calculations showed on Friday. Canadian dollar net short positions have fallen to 8,604 contracts as of July 11 from 39,372 contracts a week earlier.

Canadian government bond prices were slightly lower across the yield curve, with the two-year CA2YT=RR down 0.5 Canadian cent to yield 1.193 percent and the 10-year CA10YT=RR falling 3 Canadian cents to yield 1.899 percent.

On Thursday, the 10-year yield touched its highest since December 2014 at 1.948 percent.

Data on Canada’s manufacturing sales for May is due on Wednesday, while retail sales data for May and the June inflation report are due out on Friday. ECONCA